The impact of COVID-19 and the unpredictable nature of the recovery has put all the companies in a bad situation. The coronavirus pandemic has put a turn within the growth of the otherwise stellar performing unicorn startups of the world with homegrown OYO now saying that the sales of the company have come right down to half within the past few weeks.
OYO has “seen 50-60% drop by terms of sales,” Ritesh Agarwal, founding father of OYO, told NDTV in an interview recently. “In the days to return, consumers are going to be a lot more worried before they travel,” he said, adding that the corporate will need to make additional efforts to form consumers conscious of its sanitation initiatives to make rooms safer.
OYO on April informed employees that 25 percent of their fixed salaries will be cut and asked some staff to go on a four-month leave with limited benefits from May 4. The company which has around 10000 employees in the country, is a leading player in the hospitality industry that has been ravaged by the coronavirus pandemic.
The worst-hit sectors in this pandemic are hotels and hospitality industry and the sector is witnessing almost zero revenues for a full quarter as governments across the world imposed travel restrictions.
The fact that the hotel industry features a high amount of fixed costs has also aggravated the matter for the world. According to research carried out by UNWTO(World Tourism Organization) as of April 6, 96% of all worldwide destinations have introduced travel restrictions in response to the pandemic. Around 90 destinations have completely or partially closed their borders to tourists, while an extra 44 are closed to certain tourists counting on the country of origin.
According to an Indian Express report, the sector has now taken different routes to improve revenue. Some of the Indian hotels have started to give discounts on future bookings while some of them have started food delivery as an alternate revenue source and to solve their short term credit problem.
OYO’s layoff period had started even before the coronavirus had impacted the hotel business. The company had laid off about 1,200 employees from its Indian team and about half of it from China in January 2020.
